FCC can't afford yet another Reed Hundt wild goose chase

Reed Hundt is up to his old "managed-competition" tricks again. 

• The former Clinton-Gore FCC Chairman is now Vice Chairman of Frontline Wireless, which wants the FCC to auction spectrum to them requiring net neutrality/open access -- so effectively no company will be able/or want to pay much for the 700 MHz spectrum -- and so Frontline Wireless could capture this most valuable spectrum available at the market-managed price of -- pennies on the dollar. 
• It is highly relevant that Frontline is financially backed by big Google investor/Board members; their involvement was probably orchestrated by Google Senior advisor Al Gore, Hundt's political benefactor in the Clinton-Gore Administration.  
• A big part of Google's strategy for value creation and 90% gross margins is to take intellectual property without permission or compensation and to secure use of bandwidth and spectum below market cost. 
• True to form in this new venture, Mr. Hundt has never met a marketplace that he didn't think he could personally "manage" better than the free market can.

The FCC should be very very careful in following this policy charmer's latest government intervention advice on the 700 MHz auction, because he has been personally responsible for most all of the largest wild goose chases that the FCC has been involved in over the last few decades.

No other FCC regulator has left a bigger path of market destruction in his wake than Mr. Hundt.

• Hopefully there is sufficient institutional memory and common sense at the FCC to not get sucked into Mr. Hundt's latest managed competition scheme.

As an aside, I must commend and give credit to Randy May of the Free State Foundation for his outstanding piece yesterday "Sideline Frontline" which inspired me to blog today on this topic.

• Randy is dead on in his similar analysis and like me has lived through and witnessed Mr. Hundt's long string of "managed competition" disasters. 

Let's review evidence. 

Mr. Hundt has left the following  "Mr. Magoo-like" path of destruction in the wake of his involvement in modern telecommunications policy:

• Upon his confirmation as FCC Chairman, one of his first acts was to rollback cable rates 17% . His very harsh rate regulation destroyed any incentive for cable to invest in broadband infrastructure until Congress effectively sunsetted cable rate regulation in the 1996 Telecom Act. 
• Mr. Hundt's overly complex PCS auction rules birthed the legendary NextWave spectrum auction fiasco, where 30 MHz of prime spectrum PCS took almost a decade to get to market -- in part because of the excessive complexity of Hundt's micro-management of spectrum and wireless competition.
• Mr. Hundt, micromanagment of local phone competition put the FCC at the center of arbitrating virutally all competitive disputes with CLECs no matter how minute. Hundt admittedly tilted the playing field completely to the CLECs, which created a completely unsustainable CLEC marketplace of fantasy Hundt-onomics that ended in bankruptcy for virtually the entire CLEC industry.  
• Mr. Hundt also contributed mightily to the dotcom hype of  fiber stocks which ultimately destroyed over one trillion dollars of market value for American investors and pensioners.
• Mr. Hundt even invented a new antitrust theory, "precluded-competition" to play DOJ antitrust chief and single-handedly block the then rumored SBC-AT&T merger.
• Mr Hundt micromanaged the Bell Entry into long distance process to the point where a process that Congress expected would take only 18 months to complete, actually took 5-7 years, and required formal written applications of over one hundred thousand pages and that required delivery to the FCC on dollies!
• And who can forget, Mr. Hundt invented and implemented a completely new form of wholesale resale, UNE-P, that was never envisioned by Congress that took almost seven years and two Supreme Court decisions to stop, unwind and straighten out.

No other policy maker has had the personal hubris and iron-will to impose their personal view of how market outcomes should shake out.

• Reed Hundt has been unabashed in his personal desire to pick market winners and losers and to personally choose which technologies consumers should adopt.
• The FCC should not soon forget that Mr. Hundt's past "managed competition" ideas were some of the biggest FCC policy and implementation disasters in the history of the Commission.
• Lets hope this FCC has the good sense not to tarnish its reputation and legacy with going on another Reed Hundt "wild goose chase."